Paper 6 Commercial and Industrial Laws Arnd Auditing

7/30/2019 Paper 6 Commercial and Industrial Laws Arnd Auditing

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Cjngnercial an{ Industrial LArvs ary! Au!!!!4g

The Jigures in the margin ot1 the right side indicate full marks.Please : (i) Answer all bits of a question st one place(ii) Open a new page for answer to e new question(iii) Attempt the required number ofquestions only.

Aj,swer QuestiotLNo_l and euestion No. J which are compulsory and attempt any twofrom the rest in Section:I $td any trlto from the iest in SeQtion_II.Section -I (50 Marks)

(Cqmmercial and Industrial Laws)l. comment on rhe following based on legal provisions (no mark rbr wrong reasons orjustification)(4) Mr Menon offered on l st December, 2012 to sell his house to Mr. Polson at INR Thirty Five Lakhs. Mr polsonaccepted by email on 2nd December,20l2 at 8 A.M. At l0A.M. Mr Polson sent a Fax revoking the acceptance.Both email (i.e. acceptance) and Fax (i.e. revocation) reached Menon at the same time. Hence this was valid.(l) Provisions oflndian Partnership Act 1932 are applicable to LLPs anil the body corporate may be partner ofLLp.(cy' on.Ol.l1.2012 ,1._r."I!!5911n,taow under the custody of Mr Tarun for one rnonth and paid INR 1000 formaintenance. On l5.ll.20l2.theCowgavebinhof a Calf. On 30.1 l.l2 Tarun rerurned the Cow retaining the. Calf.:rQ Mr. S.K Paul.employed in seasonal establishment and was not employed throughout the year claimed gratuity. at the rate of l5 days wages for each year ofservice. But Ernployei rlfusedto-pay any drutuity to ",r!loy""i of seasonal establishment.(6) An individual dispute will be deemed to be industrial dispute (Industrial Disputes A cr. 1947).(p { surgty 11 djscharged from his liability where there is failure of Consideration between the Creditor and the' Pnncrpal Debtor in a Contract ofGuarantee.(g) 'A', thetuyer ordered a patent smoke consuming fumace by its Patent name for his brewery on .B,. Furnacereceived was however found to be unsuitable for the purpose. Hence seller is responsible.2. (a) Goods seized by Customs Authority is a case ofbailment under Indian Contract Act-offer your views. z(b) 'A on retirement withdrew the entire amount of his accumulation in the Provident Fund. Later on he wasappointed for a fixed tenure. Employer disagreed to allow PF. benefit in view ofhis retirement and withdrawlofentire amount. Offer your views based on Rule position. 2(c) 600 invitation cards were posted by speed post. Only 20 invitees attended function. Others received such cardsafter the date of function. Postal Deptt. replied that this delay was not willful and intentional. Hence there wasno liability U/s. 6 ofthe Post office Act, 1898 and Consumei Protection Act is not applicable in this case. Offeryour views based on Consumer protection Act. z(d) Mr A, Mr B & Mr C are Sureties to Mr D for the sum of INR 6000 lent to Mr E. Mr E failed to repay on duedate. MrA one ofthe sureties, disagreed to pay. Advice whether ,A'is right. z

INTERMEDIATE EXAMINATIONDecember 2012

Time Allowed: 3 Hours

r-P6(CrA)Syllabus 2008

Full Marks: 100

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I-P6(CrA)Syllabus 2008 (2)

Section -II (50 Marks)(Auditing)

(e) A deceit which does not deceive is not fraud. Comment. z(l) In an auction sale a bid once given cannot be withdrawn. Do you agree? 2(g) All the employees who are covered under Bonus Act were paid Holi Bonus of Rs. 500/- each. Latter on due toloss, the Employer paid minimum Bonus @ 8.33% but after deduction ofsaid Rs. 500/-. Whether Employerwasjustified. z(h) Fill in the Blanks based on factories Act 1948 ll4fi) No child shall be employed of permitted to work in any factory for more than .............. hours in a day.(ii) No female Child shall be required or allowed to work in any factory except between ............ AM and............ PM.(iii) No Child shall be employed during the Night and Night means a period ofat least twelve consecutive hourswhich shall include the interval between .......... pM and .............. eU.(iv) Nowoman shall be required orallowedto workinany factory except between the hours of .............. AMand .............. PM.3. (a) A non owner cannot make a valid Transfer of Goods. Answer with Rule position. 4(b) while discussing, Raiib told his friends that Contracts need not be perfomel-yndq certain circumstances., Deepak objecied to it. State the correct position. 4.'/ \(6) Are there any provisions in the factories Act for protection ofeyes ofWorkmen? z@; wnat is 'Noting' (N.I. Act) 419 (i) Who is 'Occupier' (Factories Act)(ii) State the Duty of the Occupier when a new manager is appointed in the factory.4. (a\,/Write short notes on any four.(i) Tie-in-arrangement

, (ii) Forfeiture of Graruity.(iii) Partialdisablement.(iv) Lawfulconsideration

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(v) Termination oflien ofunpaid Seller.[6) Mr Barun tells Mr. Tarun in presence of Mr. Arun that he is the Agent ofArun who maintains silence instead of' denying Barun's statement. Later on Barun sells Arun's Coods to Mr Thrun. Arun now disputed Barun,s title tothe goods, as Barun was not Agent ofArun. Explain whetherArun is right. z

5. P/omment onthe following statements based on legal provisions(No mark lor wrong reasons or ju sti llcation ) 2x7Fixed Deposit having Maturity of more than 12 months from Balance Sheet date was classified as CurrentAssets, under Schedule VI.Arrear Depreciation will require seperate disclosure. Depreciation was not on accrual basis.

Lt)(b)

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(3) r-P6(CrA)Syllabus 2008lc) Auditor certified a statement in the Prospectus which was subsequently found rnisleading. Auditor certifiedsuch statement as pei adviie ofmanagement. Hence.Auditoihas no fiaUility.(p) Objective ofmanagement audit is linked to concurrent Audit ofthe Company.p' Auditing in depth not possible and /or practical in all cases.(f) CARO is applicable to Foreign Companies also.(g) The Computer information system environment rnay be different in cases ofdifferent Computer system usedbut there are certain common features of all "olaput", system environment.6. 4B Fixed assets have been revalued and the resulting surplus has been adjusted against the brought forward loss.As an Auditor give your comment.(b; State the Audltors' duties towards share holders in respect of loan givqn by the Cornpany.(c) From the following, detennine the Gross profit Ratio.Gross Profit

Owners' EquityNet SalesDebt Equity

(ii) Sickness(e) How you will conduct the physical verification of Inventory to impose control over Inventory?(f) What are the activities to be undertaken by the Management Auditor in its review of Sales manasement?

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10,0002,00,0002,00,0001,00,000

Also state the purpose of determining such Ratio.(d) State the reporting requirement ofAuditor under CARO in respect of following:(i) Documents and Records, for secured loans(ii) InternalAudit systems in certain companies.

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(e) Explain the following which are part ofcontrol measure under computer infonnation svstem.(i) Audit Trails(ii) EditTest 2+2[0 Risk ofnon-detection of error is ress than the risk of non-detection of fraud-comment. 2(g) At the AGM, a resolution was passed by al1 the Share holders restricting some of the powers ofa cost AuditorState the validity ofthe Resolution. z7 (a) SEBI requires that Listed- Companies to comply with the Accounting Standards issue6 by the Institute ofchartered Accountants of India but ABC Ltd. [ai not fol]owed certain-Acc""rii"g ii"ra"ralcomr.rent withjustificatiorl/reasons. 2(b) Company Auditor received the Branch Audit Report which contains qualifications on matters specially requiredto be disclosed pursuant to schedule vl requiiernent. How this tyie of situation rrrrri lr. oi"lt wirh by theAuditor? z(c) The inherent risks in a CIS environment may have both pervasive effect and an account specific effect on thelikelihood ofmaterial mistatement. Do you agree? State ihe position. 4(d) What are expected under CARO 2003 in respect of:(i) Preferential Allotment of Shares

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I-P'6(CIA) ( 4 )Syllabus 20088_,, ,

y'a) What are the reporting standard expected from an Auditor in respect of GAAP? 4G' What are the basic documents you will demand for review of Fixed Capital Assets? 4' (c) To carry out information system or EDPAudit, cenain systematic approach are necessary. Ityou agree, Statesuch approaches. 4(d) As per Clause 49 of Listing Agreement and to comply with conditions ofCorporate Govemance, a certificate isobtained from Statutory Auditor. Answer to following points:(i) Whether this clause 49 is applicable to alt types ofCompanies?(ii) To whom this certificate is filed and/or submitted?(iii) Name the Report to which this certificate is annexed.{iv) What is the time limit of submission of quarterly compliance certificate? ly4(e) Management Audit can be conducted by the outside management consultants provided he/they fulfil cerhinconditions. What are those conditions? z

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